Following the negative experience variance in Q1 2024, French reinsurer SCOR has accelerated its annual L&H reserving assumptions review, and revealed that its Life & Health (L&H) insurance service result (ISR) in 2024 is now expected to be significantly less than the predicted €500 million outlined in its first quarter results presentation.
SCOR has decided to accelerate its annual L&H reserving assumptions review and has drawn up its best estimate view for the segment’s Q2 2024 results.
For Q2 2024, SCOR is expecting a L&H insurance service result of c. €-0.4 billion, driven notably by updates on reserves, and continued negative experience variance, partly offset by the positive effect of portfolio actions.
According to the firm, final assumption updates in H2 2024 could potentially lead to additional negative adjustments to the L&H ISR of up to €-0.1 billion by year-end 2024.
Additionally, the Q2 2024 pre-tax L&H contractual service margin at current yield curves is adjusted by approximately €-0.9 billion, driven mainly by reserving assumption changes in anticipation of the year-end review.
Final updates in H2 2024 could potentially lead to additional negative adjustments to the pre-tax CSM at current yield curves of up to €-0.4 billion by year-end 2024.
The Q2 2024 Group Economic Value (EV) is expected to be €8.3 to €8.5 billion or at €46 to €47 per share.
Due to these impacts, the Group Solvency II ratio is expected to be above 200% in Q2 2024.
The company has stated that it actively manages its solvency position and still remains confident that it will maintain the solvency ratio in the optimal range of 185% to 220% at year-end 2024. SCOR’s capital management framework, including the dividend policy, is unchanged.
These adjustments aim to strengthen the robustness of cash flow projections and reduce the risk of future earnings volatility.
Thierry Léger, Chief Executive Officer, SCOR, commented, “Today’s communication is consistent with SCOR’s proactive and transparent communication policy. Following the accelerated L&H reserving assumptions review, we have decided to launch the first of a series of determined actions aimed at restoring the profitability of our L&H business in a sustainable way. We will update the Forward 2026 plan to improve the margins and mix of our products with a strong focus on diversification.
“The new L&H business strategy and the Forward 2026 KPIs will be presented on 12 December 2024. Our P&C and Investment activities continue to deliver a very strong performance. We have full confidence in our L&H franchise and in our ability to produce higher quality and more stable results going forward.”
